Every company and every market is different. This is reflected in the layout of your warehouse – and the advice offered by our experts.
1. Define the Problem You Want to Solve
Improvement is impossible without a clear understanding of the problem. While this may seem like common sense, many engagements start without this essential step being properly defined.
Leaders often attempt to summarize all the issues within their organization into one singular problem statement. However, no organization has only one problem, and no company ever resolves every issue—it’s the essence of continuous improvement.
I suggest starting with a list of key observations or critical impact factors. Examples include:
- Over the past three years, our direct labor costs have increased by over 35%.
- The number of SKUs in our distribution center has tripled since our system was installed, and leadership is asking us to prepare for more brands.
- The number of goods shipped incorrectly is rising, impacting our customers. Reshipping and returns have increased annually for the past three years.
- My boss really likes automation. (This might not make it into your final board presentation, but it’s surprising how often we hear this.)
- The leases on my three largest distribution centers are expiring within the next 3-5 years, and I don’t believe the locations or sizes are optimal.
- Leadership wants to change our service level agreements (SLAs) with customers, requiring us to ship items the same day they’re ordered—something we can’t currently do.
The more detail you provide, the better. The next step is to rank these factors by their impact on the organization.
2. Obtain Data
To quantify the potential improvements, you must first know where you stand. Typically, we evaluate several years of data, including inventory details, SKU profiles, and order velocity. For many companies, this can be a time-consuming process, often requiring IT or external consultants’ assistance.
3. Establish Business Growth Projections
Once the data is compiled, the next critical step is aligning on projected business growth. This step is foundational, as it defines the size and throughput of the automation system. You can consider this the cornerstone of the project—success stems from here, and failure can be traced back to misalignment at this stage.
Many companies evaluate multiple growth scenarios to assess potential impacts. The most successful projects I’ve been part of involved gaining alignment from senior leadership on these projections early in the process.
4. Select Your Team
A critical factor in any project is ensuring you have the right people on the team. While team composition varies depending on the company and project, I recommend having the following key roles represented:
- Executive sponsor
- Operations
- IT
- Engineering / Continuous Improvement
- Facilities (and potentially your architectural engineering firm, if selected)
- Health and Safety
- Legal
- Human Resources
5. Engage with Automation Partners
Engaging with automation partners can start at any point, but the most logical time is after defining your problems, assembling the necessary data, and establishing your growth projections. At this stage, you’re truly ready to move forward.
There’s no magic formula for selecting an automation partner, but my advice is to talk with several. While I’d love to recommend Vanderlande, this blog must remain objective! In all seriousness, choosing an automation partner is a significant decision that shouldn’t be taken lightly. This partner will be with you for years, both during the project and throughout the life of the system, making it akin to a long-term relationship.
My suggestion is to establish a comprehensive selection process and take your time. A typical process involves preparing a Request for Information (RFI) document, which is sent to a shortlist of potential automation providers. In the RFI, briefly describe your project and desired outcomes, and ask the potential partners to indicate their intent to bid and provide key information. Common items requested include:
- Company overview and experience
- Company size
- Local team size (if not based in your home country)
- Company financials
- Technologies manufactured and their locations
- Software integration capabilities (WMS, ERP)
- Relevant case studies
Before sharing any further project details, ask each company to sign a mutual Non-Disclosure Agreement (NDA).
6. Select an Automation Partner
Once the RFI responses are in, you’ll typically release a Request for Proposal (RFP) to the automation partners who’ve expressed interest. The RFP should be non-prescriptive, allowing partners to use their expertise to propose solutions that best address your needs.
The best selection processes I’ve participated in included these key elements:
- Unlimited Access to Data: Partners need full access to all requested data. Expect follow-up questions from automation providers, and while this might require additional work from IT or third-party consultants, it’s well worth the investment.
- Access to Your Team: Automation partners must understand your business deeply, which requires access to your facilities and teams. Don’t turn away questions; instead, seek to understand their reasoning. At Vanderlande, we often hold in-person or virtual workshops to build a thorough understanding of the client’s objectives.
- Encourage Design Iteration Reviews and Budget Submissions: Avoid surprises at the end of the process by reviewing design concepts, iterations, and preliminary budget proposals along the way. This reduces the risk of misalignment later on.
- Visit Reference Sites: Visit sites where the automation technology is already in use. Observe both the technology in action and how the end users operate it. Speak with operators to learn about their experience with the automation partner, both during implementation and post-project.
- Final Proposal and Presentation: As you near the end of the selection process, review the final proposal. Evaluate the potential partner’s understanding of your business, the proposed technology, and the system’s financial feasibility. Confirm the alignment between the proposed solution and your objectives.
7. Formal Selection of Automation Partner
At this stage, formally select the automation partner and set the next steps in motion. The most effective method is to inform the selected partner of your decision and enter into a contract to finalize the system design and pricing.
8. Engineering Project
The engineering phase typically lasts 3 to 9 months. During this time, you’ll collaborate closely with your automation partner to refine the design, often incorporating feedback from the selection process. This stage culminates in a firm proposal and draft contract, and your legal team will work to finalize the contract language.
9. Contract Signing and Project Handover
Once the contract is signed, the project enters the execution phase. Ensure key project members remain involved throughout this phase to maintain continuity and a smooth transition.
While other processes may also lead to success, the steps outlined above have consistently proven effective in my experience. As always, our team at Vanderlande is available to assist and answer any questions to help ensure the success of your automation journey.